Laszlo Tunyogi Dr.GGI CONFERENCE October, 2013, ROME 1 US. AND EU FREE TRADE AGREEMENT ECONOMIC NATO...

Laszlo Tunyogi Dr. GGI CONFERENCE October, 2013, ROME

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US. AND EU FREE TRADE AGREEMENT

ECONOMIC NATO - OR A DREAM


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OVERVIEW

• Antecedent

• Why FTA?

• Why U.S – EU?

• Hurdles to the deal

• What to do in GGI?

• Conclusions


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STATE OF THE UNION13. 02. 2013.

• „Tonight, I’m announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union, because trade that is fair and free across the Atlantic supports millions of good-paying American jobs.”


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Barroso, on Wednesday 13 February

• “There have been in the past several attempts to launch this process of negotiations, but every time there were obstacles and resistance.”

(WTO, multilateral attempt: Deadend)


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Trade-negotiation round of the World Trade Organization (WTO) 2001.-2012(?)

• Lower trade barriers around the world

• In 2008, talks have stalled over a divide on major issues,

• such as agriculture,

• industrial tariffs and

• non-tariff barriers,

• services, and

• trade remedies agricultural subsidies

• The July 2008 negotiations broke down after failing to reach a compromise on agricultural import rules

The most significant differences are between

European Union (EU), United States (USA),

Japan Brazil, China, India,

South Korea, South Africa.


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Barroso to John Kerry22. 04. 2013.

„I believe we can get a mandate from our member states before summer, that we can keep the momentum and have this historic game changer agreement ready as soon as possible”


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Rompuy, Obama, Barroso

„The progress achieved bilaterally on the liberalisation of trade and investment and the regulatory and non-tariff barrier issues will help to breathe new life into transatlantic trade, as well as help to develop global rules to reinforce the multilateral trade system”.


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De Gucht (EU Trade comissioner) and Froman (US Deputy National Security Adviser)

„The future transatlantic agreement was not aimed against developing countries, and that it would give fresh momentum to the multilateral negotiations at the WTO. “Nothing that we are doing here is about ganging up on emerging economies. Our fervent hope is that what we're doing here will have a positive impact, including with countries like Brazil”,


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Behind statements

• US:– Reindustrialiling the USA

• Return manufacturing activity from China– Computers, cars,

householdappliances, furnitures, clothing

– EU is more trasparent, prices, costs about the same, intellectual properties are respected.

• EU:• To avoid the risk of

becoming isolated if Americans focus on Pacific Ocean against China and Asia

• Reduce Asia-s overweight on EU market

• Convince Great Britain to stay in the EU (referendum until 2017)


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OECD statistics (2011) EU (27) USA China India RussiaSouth Africa Brazil

Total population (million) 502 312 1.347 1.210 142,9 50,5 192,8

GDP output approach (trillion USD) 16.466 14.991 11.300 4.200

2.558 546 5.879

GDP growth rate (%) 1,5 1,8 10,4 9,1 4,3 3,5 7,5


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Trade relation is the backbone of the world economy

• European Union and the Unites States account for about half of the world GDP (31,5 Bn =47%)

• one third of global trade flows • Each day goods and services of almost € 2 billion are

traded bilaterally • bring overall annual gains of 0.5% increase in GDP for

the EU and a 0.4% increase in GDP for the US by 2027. • €86 billion of added annual income to the EU economy

and €65 billion of added annual income for the US economy.

• BUT: BRICS account for more than 1/3 of the world GDP( 24,5 Bn = 37%)


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OBSTACLES

• Time-schedules

• Fassion of pessimism in Europe

• Local interests

• Different regulations


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Time schedule– negotiating mandate,

agreed in the 27 capitals (28 from 1 July with Croatia), is not easy

– current European Commission expires in autumn 2014

– On the American side, in two years' time there will be the mid-term elections,

• Without the ultimate approval of US Congress and the EU Parliament, there will be no agreement


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Local Interests

• to France, GMOs (genetically modified organisms) are to be hived off from the negotiations

• Château, prosecco or champagne denominations for wines cannot be indicated on products across the Atlantic

• France also wants to exclude defence („we will not accept opening ours when the American defence market is closed”, (French Minister for Trade Nicole Bricq)


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Elimination of Custom Duties

– tariff barriers are relatively low today (on average 5.2% in the EU, 3.5% to the United States) Eliminating existing tariffs would boost two-way trade by $120 billion within five years and and $180 billion the U.S. and E.U combined GDP.


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Behind the border obstacles

• different safety or environmental and safety (test) standards for cars.– Light– Door-lock– Brakes– Steering– Seats– Seat belt– Electric window


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Cultural and social issues

Several European professional film organizations (Eurocinéma, EuropaCinéma, EuropaDistribution, FIAD, SAA and UNIC) to ask European leaders not to include the audiovisual sector in the draft free trade agreement. (Commission staff said that this did not mean that the audiovisual sector would be totally excluded from the negotiations.)


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chemicals, pharmaceuticals and medical devices

Consequences

• Unnecessary barriers– European blue cheese (not pasteurised)

• Unnecessary expenses– Separate production lines (car security

standards)

• Unnecessary duplication– European Chemicals Agency /US

requirements


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SOME OPEN QUESTIONS

-How can we reduce legal risk, compliance complexity and regulatory uncertainty due to differences in the EU and the US regimes?

-Does mutual recognition require identical legal texts or should the objective and the outcome of the regulation be decisive?

-How can we facilitate the comprehensive and timely pooling of information?

-How can we achieve regulatory coherence in specific pieces of legislation


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Opportunities for GGI members

• Euroatlantic info-bridge within GGI (see attached chart)• Harmonization standards and procedures

– Public procurement – chemicals, – automotive, – pharmaceuticals – medical devices

• Intellectual property to identify a number of specific issues regarding their

divergences.


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Opportunities for GGI member’s clients

• You as GGI member can provide the latest and nonpublic information on EU developments – Drafts, green papers etc. Will be delivered via

mail upon request

• You as GGI member can transfer your client’s reflections to the EC

• Your voice in Europe – see next presentation


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UN-EU-GGI Partnership

• To register at ECOSOC to have access to conferences, events, forums, decision makers in the UN family

• To be active at EU as stakeholder, to participate in open discussions on the subject

The progress of negotiations

• 8 July, 2013: 1st round in Washington

• 23-27 September, 2013: working group meetings

• 7-11 October, 2013: 2nd round

• December, 2013: 3rd round

• January, 2014: Stock-taking exercise with EU Commissioner Karel de Gucht and US Trade representative, Michael B. Froman


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Other negotiations due to TTIP

• Japan: resolve to accelerate free trade negotiations (next meetings: end of October, beginning of 2014)

• Singapore: Free trade agreement initialled, to be approved by political authorities (opportunities in services sector and PP)

• WTO-Doha: negotiations relaunched


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7. Want more about…?• http://ec.europa.eu/internal_market/publicprocurement/

index_en.htm• http://search.wto.org/search?

q=GPA&site=English_website&client=english_frontend&proxystylesheet=english_frontend&output=xml_no_dtd&numgm=5&proxyreload=1&ie=ISO-8859-1&oe=ISO-8859-1

• http://www.planpublicprocurement.org/main/index.php?option=com_content&view=article&id=603:call-for-paper-proposals-5th-international-public-procurement-conference&catid=1:latest-news&Itemid=50

THANKS!Dr. Laszlo [email protected]+41 76 278 81 32+36 30 950 60 11

Laszlo Tunyogi Dr.GGI CONFERENCE October, 2013, ROME 1 US. AND EU FREE TRADE AGREEMENT ECONOMIC NATO...

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